Business_Report

OrotonGroup Business Report Executive Summary The purpose of this report is to inform the Directors of the OrotonGroup on their situation as a business. In order to do this, the following key areas will be covered: Skills of an effective manager. Changes in the external environment that have affected the OrotonGroup An appropriate strategy that OrotonGroup may use to effectively manage the future growth of its brands. Changes to OrotonGroup since 2002 and how changes have been managed. Skills Of An Effective Manager An effective manager should possess many skills in order to successfully manage their business. Managers should possess the ability to be flexible and adapt to changes in the market. They must be proactive in their approach to change, because the market is highly competitive and market and consumer trends are constantly changing especially in the fashion industry. They should also possess visionary skills. To have a direction in which their business is heading towards. Vision is essential, for without it the business is without guidance and therefore have no sense of cooperation and commitment which makes achieving goals impossible. Managers should also have people skills, so they can effectively communicate with other people and understand their needs. This includes the ability to communicate the goals of the business and motivate, lead and inspire everyone associated with the business. Changes In The External Environment OrotonGroup has seen countless changes in the environment around them affecting the overall running of the business. The fashion industry has an increasing amount of competitors across the retail market including Gucci, Armani, Calvin Klein, Versace and Country Road which have affected sales. Economic influences have also seen change in OrotonGroup. Fluctuations in the level of economic activity in Australia and in countries supplying OrotonGroup with products have directly affected sales. Periods experiencing economic growth saw extraordinary levels of sales between 1945 and 1960, making OrotonGroup the leading handbag brand in Australia. But also in an event of an economic downturn OrotonGroup has also felt the consequences of being luxury items. Geographical factors have also caused changes in OrotonGroup. International suppliers to OrotonGroup especially from Germany and Japan and in the transportation of their goods have also caused problems. This caused the development of a marketing strategy based on promotion. Also with the lack of international recognition by some of its competitors, but this has changed due to the signing of internationally known Polo Ralph Lauren. Social factors such as fashion and a more multicultural demographic have been major sources of change in OrotonGroup. Increased tourism worldwide and in Australia has generated an increased amount in sales revenue but with failure to adapt to changing fashion trends and consumer tastes have affected sales. By 1992 the perception of the Oroton brand was for the older, more conservative demography which led to a decrease in sales revenue. There are also legal and political influences which have affected OrotonGroup. This included World War 2 preventing the acquisition of supplies from Japan and a Terrorism act on September 11 2001 led to a decrease in tourism to Australia which led to a decrease in sales revenue. Advancements in technological developments impacted OrotonGroup in relation to manufacturing process. With advancements in technology and poor manufacturing techniques in Australia resulted in importing supplies. An Appropriate Strategy To Effectively Manage Future Growth. OrotonGroup is currently experiencing an increase in revenue up 10.5% to $134m and total expenses down to 48% of sales and anticipate to continue to perform very strongly. With the business experiencing a surplus, expansion is a strategy to effectively manage future growth and start selling your product to new groups of prospective customer. Expansion is highly complex and needs to have a detailed plan to support it. This can mean expanding the brands of Oroton and Polo Ralph Lauren; or expanding into other brands that foresee growth; or expand our geographical area into other areas. Oroton and Polo Ralph Lauren have been very strong and have been experiencing and expecting significant growth. By expanding the brands of Oroton and Polo Ralph Lauren and with the business currently experiencing a surplus, the business can afford to establish more stores in Australia and New Zealand. This would in the long run, create increased profit margins if they are successful. Expanding OrotonGroup into other brands such as Calvin Klein or any other high profile brands will also provide another source of revenue for the business. With the selling of Marcs, Aldo and Morrissey, the business can afford to expand to increase sales and their consumer base. Although not in an instant, introducing new products will strongly expand your share of particular market. This will see an increase of double of your current revenue gains. Of course usually your new product will not sell as good as your old ones, but if you persist, you will catch up their sell in a couple of years. You can choose between adding new product by simply reselling or distributing product that complement with your line or you can innovate and create your own new product that nobody does before. By growing sales with new products is an effective way to increase revenue and your share of the market. With this approach you seek to achieve objectives through the introduction of new products. This can be accomplished by; introducing updated versions or refinements to existing products or; introducing products that are extensions of current products; or introducing new products not previously marketed. Expanding internationally and establishing stores overseas particularly in America and Europe will create a larger consumer base and therefore lead to increased revenue. This strategy looks to increase the marketer’s overall percentage or share of market. In many cases this can only be accomplished by taking sales away from competitors. This strategy can also manage future growth of brands by relieving the pressure from the main brands through expansion and therefore be able to easily to manage their brands. The strategy of expansion or expanding can increase revenue and therefore use those funds to upgrade facilities, manufacturing factories and machinery. In turn this will lead to increase in productivity. Consequently, this strategy often relies on aggressive marketing tactics. Changes That Have occurred Post 2002 And How They Were Managed There have been many changes that have occurred to OrotonGroup since 2002. The changing of name to OrotonGroup from Oroton International was done to reflect its expanding portfolio of brands and Australian focus. There have been changes to the legal structure of the company, appointing a new CEO Sally Mcdonald in 2006. After the OrotonGroup experienced a net loss of $9.4m the business decided to implement the business restructure and simplification program in 2006 which will enable the company to focus on its core Oroton and Polo Ralph Lauren brands. This meant the selling of their previous brands; Marcs, Morrissey, and Aldo Footwear which were performing poorly in the market. OrotonGroup have also upgraded their IT infrastructure and enhanced the Oroton website to manage steadily increasing traffic levels to update their current technology to perform better in IT. Summary This business report has covered the areas of skills of an effective manager such as flexibility and adaptability, visionary skills and people skills. This report has also described changes in the external environment that have effected the OrotonGroup. This report has also proposed an appropriate strategy that OrotonGroup may use to effectively manage the future growth of its brands and explained changes that have occurred post 2002 and how they were managed. Bibliography Invest Smart (2010)[Internet]Australia,Pyrmont. Available from: GuruSoftware. Strategies for Business Growth[Internet]. Available from: Oroton(2010) [Internet]. Available from: Oroton(2009) Annual Report 2009[Internet]. Available from: Oroton(2005) Annual Report 2005[Internet]. Available from: Danu S. (2010) Growing with Market Strategy[Internet]. Available from: The Oroton Group Case Study Worksheet Skills of Management Worksheet